Following the fund fraud cases of Tom Petters for the past few weeks leads businesses on Wall Street to a very hard reality: charm is not an indication of trust, it’s an illusion. As noted today in his home state’s Star Tribune, ‘a simple background check would have raised thickets of red flags.’ The effects of the fraud came just in time for the stock market decline and a strained economy.
Petters sits in jail for one of the most long-lived money laundering schemes in history. As owner of Polariod and Sun Country Airlines as well as partners in several hedge funds and banks that never thought to conduct a background check on him, Petters’ scheme crushed a worldwide enterprise of star players in the marketplace.
Now his employees and partners are experiencing the worst of their nightmares: dissolving businesses and bankruptcies. Fortunately, some firms, like Bookbinder Capital Management, were smart enough to hire a background check firm to look into his past and present before investing in his faltering empire.
A lesson for all big and small business: don’t even think about risking your business to a big player who walks through the door with a portfolio of treasures without first investigating. It’s people like Tom Petters that ultimately cause the decline in American prosperity.
As we are learning more and more every day, background checks are a necessity at every level of business and society. The Petters case didn’t just affect the big moguls, it trickled down to the employee that struggles every day to support a family. And, in this economy, what a time it is to lose a job.

*We welcome relevant comments and questions from consumers, experts, and human resources professionals. Please do not submit comments with advertisements as they will not be posted publicly. Thanks for visiting our blog!